Inflation in China hit a 15-month low in December but still remained stubbornly high at a time when policymakers are bracing for a slowdown in the world's second largest economy. The nation's broad measure of consumer prices grew 4.1% last month from a year earlier. That's down slightly from the year-over-year growth of 4.2% registered in November. For the full year, inflation increased by 5.4% in 2011, well above the government target of 4%. The central government is hesitant to loosen monetary policy for fear of worsening inflation, even in the face of an economic slowdown.

A seasonal surge in consumption during the Chinese New Year holiday lifted China's inflation in January for the first time in five months. The country's consumer price index rose 4.5% from a year earlier, China's National Bureau of Statistics said Thursday, up from 4.1% a month earlier. Prices traditionally rise during the weeklong lunar new year holiday in response to the massive boost in spending on gifts, food and services. China has raised interest rates, bank capital reserve ratios and placed restrictions on the nation's property market in an all-out effort to drive down inflation, which hit a three-year high over the summer.

China's annual inflation rate fell to a 20-month low in February, giving policymakers room to ease lending at a time of tapering economic growth. “The inflation story is over, leaving [China's central bank] with fewer excuses not to step up its easing efforts, especially given a sharp slowdown in exports so far this year,” said Qu Hongbin, co-head of Asian Economics Research for HSBC, in a note to clients Friday. “Get ready for more steps toward policy easing.” Consumer prices rose 3.2% from a year earlier, down from 4.5% annual growth in January, China's National Bureau of Statistics said Friday.

About two years ago I wrote an article saying that despite the lack of evidence, and despite the near-universal belief among economists that it was not a problem, I was worried about inflation. My reason was that I couldn't see how the government could pay off the massive debt it was running up except by inflating at least part of it away. For this, I was widely ridiculed, and I'd like to take this opportunity to claim vindication. That is, I'd like to — but I can't. Inflation has been creeping up the last couple of years — from less than 2% to more than 3% — but that's still pretty low. Nevertheless, I double down: Barring a miracle, there will be a fierce storm of inflation sometime in the next few years, and it will wipe out a big chunk of the national debt, along with the debts of individual citizens and the savings of others.

China raised required reserves to a record 19.5% on Friday, adding to an increasingly aggressive effort by Beijing to stamp out stubbornly high inflation. The fifth increase since October will require the country's lenders to lock up a bigger chunk of their deposits at the central bank, removing cash from the fast-growing economy that otherwise would be pushing prices higher. The move by the People's Bank of China followed an acceleration in inflation to 4.9% in the year to January, which was accompanied by worrisome signs that price pressures were spreading beyond food to property and consumer goods.

Re "Higher inflation might be good for the economy," Column, July 25 Michael Hiltzik's suggestion that inflation is part of the answer to reducing our debt is immoral. People who saved to provide for their needs in the future would find much of their savings destroyed. Those who bought unaffordable items on credit would pay less than they promised. People who lent money to the government or others believing they would be paid back would get less than the value of their loans.

BEIJING - Inflation in China moderated last month in another sign that the world's second-largest economy is cooling. Consumer prices grew 3.4% from a year earlier, China's National Bureau of Statistics said Friday. That's down from 3.6% year-over-year growth in March. “We think the inflation outlook for this year is benign,” analysts at IHS Global Insight in Beijing told clients in a research note Friday. The data release comes a day after China reported surprisingly weak trade numbers for April.